With video gambling – particularly standalone gambling parlors – continuing to expand in North Riverside, the village is looking to cash in by hiking liquor licenses associated with those establishments for the second time since the special licenses were instituted in 2016.
If you operate a video gambling parlor in North Riverside in 2019, the Class G licenses, which allows sales of beer, wine and hard liquor, will set you back $15,000. Meanwhile, a Class G1 licenses, which allows the sales of just beer and wine, will cost $13,000.
In the years since the first of the village’s gambling parlors, Betty’s, opened its doors in the North Riverside Park Plaza on 25th Street in 2014, the standalone casinos have come to provide an important revenue stream for North Riverside.
Presently there are eight gambling parlors that dot the village, especially along Cermak Road where there are four between First Avenue and 19th Avenue. In 2019, those eight gambling parlors will bring the village $108,000 in revenue for their liquor licenses alone.
When the village instituted the licenses in 2016, the Class G cost $6,000 and the Class G1 cost $5,000. North Riverside officials moved a year later to double the fees, and now have tacked on an additional $3,000 each.
According to Mayor Hubert Hermanek Jr., the village chose to charge such high fees for gambling parlor liquor licenses for a couple of reasons. First, North Riverside is a non-home rule municipality. As such, the village is limited by state law in how much they can charge establishments annually for video gambling machine licenses.
Non-home rule communities can only charge establishments $25 per machine for a license fee. Non-home rule communities, those over 25,000 people, have much wider latitude when it comes to machine licensing, with some cities charging $500, $1,000 or more per machine annually.
“With us being non-home rule, we have to be more creative,” Hermanek said. “We make up the difference, instead of having licenses on machine, with the liquor licenses.”
Another reason the village charges such high liquor license fees? Because the corporations that own the parlors are willing to pay it.
“There’s not one company that has criticized it,” Hermanek said.
The liquor license revenue is on top of revenue the village receives as its share of the state’s video gambling tax. The state of Illinois skims 30 percent off the top of net video game terminal income and then delivers 5 percent of that to the municipality where the machines reside.
In 2013, the first year North Riverside allowed video gambling, the village took in about $22,000 in gaming taxes.
By the end of 2018, North Riverside’s annual take from video gambling taxes is expected to approach $250,000, and the village is projecting that number to keep increasing to $290,000 by 2021.
When it comes to raking in revenue, the gambling parlors, whose licenses allow them to be open from 7 a.m. until 1 a.m., are at the top of North Riverside’s video gambling pyramid.
Through September, the latest month for which there are figures from the Illinois Gaming Board, the top five gambling revenue-producing establishments in 2018 are gaming parlors.
The other three parlors have been open for less than six months. Even at that, Lucky Day Gaming Café, which opened in May at Desplaines Avenue and Cermak Road, already ranked eighth out of 15 establishments with gambling licenses in North Riverside through September.
The only non-gaming parlors in the village’s top eight in gambling revenues are Bar-Tini Lounge, a tavern on Desplaines Avenue, and the regally named King Cobra Lounge, which essentially operates as a gaming parlor inside the minimart of the Citgo gas station at 8545 Cermak Road.
Although Hermanek has received some complaints about the proliferation of video gambling in the village, he defended the practice as a way to fill vacant storefronts and raise revenue to fund village operations, offsetting the loss of sales tax revenues as big box stores close or move out of the village.
“If it keeps [property] taxes down and services high, I think the benefits outweighs not having them,’ said Hermanek.
As far as the continued proliferation of gambling parlors in North Riverside, Hermanek said he thought the village would have reached a saturation point by now. But that doesn’t appear to be the case.
“I get a call once every three weeks asking about restrictions on gambling,” said Hermanek. “The revenues keep going up and up and up. It hasn’t peaked yet.”
While total revenues keep rising because more gambling establishments keep opening, there are signs the revenue train is slowing for individual businesses.
The village’s two oldest gambling parlors have seen some revenue losses recently.
Net revenues at Betty’s fell for two consecutive years from their peak of $792,431 in 2015 to $629,710 in 2017. However, the gambling parlor is ahead of last year’s revenues year over year through September.
At Spins, net revenues through September are down about $52,000 year over year compared to 2017.
Revenue trends at local bars and restaurants are mixed. Through September, gambling revenues compared to the same period in 2017 are lower at Chef Shangri-La and The Sweet Spot and about flat at Sliccily Pizza Pub, which has a gambling parlor, Lacey’s, right next door.
Both The Sweet Spot and Bar-Tini Lounge saw their annual net gambling revenues dip in both 2016 and 2017.
Meanwhile, Tipsters Village Pub has seen its gambling revenues increase every year since 2015. Part of the reason may be due to the fact that Village Pub went from four machines to five in 2017. But Village Pub’s gambling revenues through September are running ahead of 2017 during the same time period.